Periodic Cost Processing Logic Examples TW

May 2004

Contents

1. INTRODUCTION ..................................................................................................................... 2 2. Transaction Types in PAC logic: .............................................................................................. 3 3. PERIODIC COST PROCESSING LOGIC................................................................................ 4 a) Compute Acquisition Cost................................................................................................. 4 b) Current Period Beginning Balance:................................................................................... 4 c) Low Level Computation .................................................................................................... 4 d) WIP Job Information: ........................................................................................................4 e) Cost Processing for Group 1 and 2................................................................................... 4 4. Periodic Cost Processing Logic Scenarios............................................................................... 6 4.1 Pre-Requisite .................................................................................................................. 6 4.2 Business Scenarios ........................................................................................................ 8 4.2.1 Scenario1: Standard Job....................................................................................... 8 4.2.2 Scenario2: Non-Standard Job............................................................................. 10 4.2.3 Scenario 3: finished good with complex transaction ........................................... 13

1 PAC_Logic_Examples.doc Oracle/Client Confidential - For internal use only

doc Oracle/Client Confidential . The transactions have cross period. INTRODUCTION Periodic Costing is an option that enables customers to value inventory on a periodic basis. 2.Periodic Average Costing (PAC) . sales order shipping and RMA. return to vendor.For internal use only . Oracle Cost Management provides support for two methods of Periodic Costing: . which uses either the standard or average or FIFO or LIFO costing methods. A finished good with complex transaction including purchasing. As an option to the mandatory perpetual costing system.1.Periodic Incremental LIFO (Last– In First– Out) This paper describes in detail of the PAC cost processing logic for transactions in following scenarios: 1. 3. Standard Job completion and Job partial completion with issue more materials and resources. Standard job and non-standard jobs. 2 PAC_Logic_Examples.

For internal use only . a): These transactions will be processed first to calculate the period weighted average item costs (PWAC). Group 2: Material Inventory Transactions to use above Period Average Costs. it requires to process previous level transactions first. 3 PAC_Logic_Examples. PO Distribution Adjustment. and WIP Completion. Referred in this paper as Group 1 transactions. Return from WIP. Transaction Types in PAC logic: Basically we categorize material transactions under following categories based on Transaction types: 2. however. Physical Adjustment.doc Oracle/Client Confidential . and MISC transactions w/o a user entered value. It is Cost Owned transactions. b): WIP Scrap. Material Issue. 2. Sales Order Issues. WIP issues. Return To Vendor. MISC transactions with a value. and Inter-Organization Transfer. Sub-Inventory Transfer.2 Cost Derived Transactions Cost Derived transactions use system calculated PWAC which is based on Cost Owned transactions. Assembly Return.1 Cost Owned Transactions: The Cost Owned transactions carry its own transaction values and can be sub-divided into two sub-groups. Cycle Count Adjustment. Referred in this paper as Group 1' transactions. Referred in this paper as Group 2 transactions. It includes PO Receipt.2. It includes Account Issues.

WIP cost processor computes the net material quantity issued for this period (This information is build while processing the component material transaction or backflush transactions). average actual outside processing cost. Logically periodic cost processing can be categorized under following phases: a) Compute Acquisition Cost This cost is calculated cost for all purchased items in the period based on receipt-invoice matching. e) Cost Processing for Group 1 and 2 The periodic cost manager initially calculates periodic weighted average cost for all the items 4 PAC_Logic_Examples.3. resource/OSP based overheads are applied to the WIP operation based on periodic Rates for the resources charged. For outside processing. otherwise. charges Materials to jobs and relieves costs from the jobs for completion. In Periodic costing WIP Module processes WIP related transactions. It also flushes out the value from all jobs (non standard) that do not have an assembly reference.For internal use only . PERIODIC COST PROCESSING LOGIC Periodic Costing allows you to cost items from one or more inventory organizations on a periodic basis. c) Low Level Computation In this phase cost processor fetches items having WIP assembly completion.doc Oracle/Client Confidential . If a job close transaction lies in the period it flushes out values for discrete jobs. WIP Resource-Overhead cost is calculated based on move transactions quantity completed past each operation for a given job for the period and Resource/OSP charges based on periodic rates. The periodic cost manager processes transactions these transactions and other cost derived transactions for these items based on low level codes starting from the lowest level. For each resource/OSP transaction. Weighted average actual cost of a manufactured item is a rollup of average actual resource cost. the acquisition cost is taken. The move-based overheads are charges based on periodic Rates set up in the periodic cost type for the inventory organization. This is used in computing the current cost of the item in the current period. For manufactured items. This cost is based on invoice price if the invoice is available. Periodic Costing is the sum of the actual cost of resources and materials consumed. average actual material cost and average standard overhead cost incurred up to a specified period for completing one unit assembly of that item. Adds the charges incurred in this period to the beginning balance for the period (obtained from the prior period run). it uses PO price for acquisition cost. the purchase price is used for purchased items. b) Current Period Beginning Balance: In general. return or scrap. This is used to get the elemental job value of each discrete job. scrap or returns transactions and calculate the low level code. d) WIP Job Information: The WIP cost processor builds resource and overhead information for all relevant jobs. the last period ending balance is the current period beginning balance. If the invoice price is not available.

Then periodic cost manager processes transactions for items having WIP assembly Completion.having un-costed material transactions.For internal use only . 5 PAC_Logic_Examples. and Return transactions. those transactions. which do not require to process previous level transactions first. carrying their own acquisition cost (Group 1). Periodic cost manager fetches remaining cost derived transactions based on low level codes starting from the lowest level. using the PWAC calculated above. it processes all un-costed cost derived transaction for items having no completion transactions in the period i.. Assembly Scrap. date and time.e. While processing cost carrying transactions. When the manager completes cost carrying transactions. since previous level transactions are already processed for these items.doc Oracle/Client Confidential . they are ordered by transaction types.

4.For internal use only . Periodic Cost Processing Logic Scenarios 4.Resources Rsc Seq 10 Resources Usage RSC01 1 Resource / Overhead Setup Table 4:Resource Rate Details Resources RSC01 Resources OVH01 Basic Item Basic Resource Rate 10 / Item Resource RSC01 Rate 1 / Resource Unit Table 5:Overhead Rate Details 6 PAC_Logic_Examples.1 Pre-Requisite Item Setup Table 1:Item Cost / Storage Details Items PUR01 PUR02 FG01 Item Type Unit Cost Subinventory Qty Stock Stock FGI 1000 1000 0 Purchased Item 20 Purchased Item 10 Finished Good Routing Structure Figure 1:Routing Structure for Item FG01 OP10 RSC01 Table 2:Routing Details .Operations OP Seq 10 Op Code ASSY Department Count Point ASY1 Yes Backflush Autocharge Yes Yes Table 3:Routing Details .doc Oracle/Client Confidential .

doc Oracle/Client Confidential .For internal use only .BOM Structure Figure 2:Assembly Structure for Item FG01 FG01 PUR01 Table 6:BOM Details Item Seq Op Seq 10 20 10 10 Items PUR01 PUR02 PUR02 Qty 1 1 WIP Supply Type Operation Pull Operation Pull 7 PAC_Logic_Examples.

Scrap 10 units with Scrap Account at ‘OP10’ for Job #JOB-A02.2.2 Business Scenarios 4.g. Step i) Go to Move Transaction form. Step g) Go to Resource Transaction form. Move 100 units from ‘OP10 Queue’ to ‘OP10 To-Move’ for Job #JOB-A02. Step c) Complete 100 units for Job #JOB-A01. Step j) Go to Move Transaction form. Step m) Closed Period Step n) Complete 50 units for Job # JOB-A02 Process material transactions of items that have no WIP completions e.For internal use only . Issue Material 10 units for Item PUR01 for Job #JOB-A02. Step e) Go to Move Transaction form. Step f) Go to Material Transaction form. PUR01 and PUR02 first: 100 PUR01 issued to A01 in step b o A01 PL Material = 0+100x$20 = $2000 100 PUR02 issued to A01 in step b o A01 PL Material = $2000+100x$10 = $3000 100 PUR01 issued to A02 in step e o A02 PL Material = 0+100x$20 = $2000 100 PUR02 issued to A02 in step e o A02 PL Material = $2000+100x$10 = $3000 10 PUR01 issued to A02 in step f o A02 PL Material = $3000+10x$20 = $3200 Process resource transactions: 100 RSC01 charged to A01 in step b o A01 TL Resource = 0+100x$10 = $1000 100 OVH01 charged to A01 in step b o A01 TL Overhead = 0+100x$1 = $100 8 PAC_Logic_Examples. Step d) Create Standard Discrete Job #JOB-A02 for Item FG01 for Qty 100. Scrap 10 units without Scrap Account at ‘OP10’ for Job #JOB-A02. Charge Resource 10 Usage for Resource RSC01 for Job #JOB-A02.1 Scenario1: Standard Job Step a) Create Standard Discrete Job #JOB-A01 for Item FG01 for Qty 100. Step h) Complete 30 units for Job #JOB-A02. Step b) Go to Move Transaction form. Move 100 units from ‘OP10 Queue’ to ‘OP10 To-Move’ for Job #JOB-A01.4.doc Oracle/Client Confidential .

e.doc Oracle/Client Confidential .1 o The periodic cost at this point is the periodic value over the periodic 9 PAC_Logic_Examples. o A02 PL Material = $3200-10x($3200/100) = $2880 o A02 TL Resource = $1100-10x($1100/100) = $990 o A02 TL Overhead = $110-10x($110/100) = $99 Process completion transactions of items that have WIP completions. FG01 next 10 FG01 scrapped with scrap account from A02 in step i.- 100 RSC01 charged to A02 in step e o A02 TL Resource = 0+100x$10 = $1000 100 OVH01 charged to A02 in step e o A02 TL Overhead = 0+100x$1 = $100 10 RSC01 charged to A02 in step g o A02 TL Resource = $1000+10x$10 = $1100 10 OVH01 charged to A02 in step g o A02 TL Overhead = $100+10x$1 = $110 Process scrap transactions of items that have WIP completions e. FG01 100 FG01 completed in step c o A01 PL Material = $3000-100x($3000/100) = $0 o A01 TL Resource = $1000-100x($1000/100) = $0 o A01 TL Overhead = $100-100x($100/100) = $0 o INV PL Material = 0+100x($3000/100) = $3000 o INV TL Resource = 0+100x($1000/100) = $1000 o INV TL Overhead = 0+100x($1000/100) = $100 o The completion cost is the total relieved value over the relieved quantity = ($3000+$1000+$100)/100 = $41 o The periodic cost at this point is the periodic value over the periodic quantity = ($3000+$1000+$100)/100 = $41 30 FG01 completed in step h o A02 PL Material = $2880-30x($2880/90) = $1920 o A02 TL Resource = $990-30x($990/90) = $660 o A02 TL Overhead = $99-30x($99/90) = $66 o INV PL Material = $3000+30x($2880/90) = $3960 o INV TL Resource = $1000+30x($990/90) = $1330 o INV TL Overhead = $100+30x($99/90) = $133 o The completion cost is the total relieved value over the relieved quantity = ($960+$330+$33)/30 = $44.g.For internal use only - .g.

38462 o INV TL Resource = $1330-10x($1330/130) ~ $1227.38462 o INV TL Resource = $1227.69231+50x($1920/60) = $1777. FG01 100 FG01 completed in step n o A02 PL Material = $1920-50x($1920/60) = $320 o A02 TL Resource = $660-50x($1920/60) = $110 o A02 TL Overhead = $66-50x($1920/60) = $11 o INV PL Material = $3655. Issue cost derived transaction at periodic cost: 10 FG01 issued in step l: o INV PL Material = $3960-10x($3960/130) ~ $3655.69231+$177.1 o The periodic cost at this point is the periodic value over the periodic quantity = ($5255.7153846154 Step k) Close Period Step l) Go to Miscellaneous Transaction form.76923+50x($1920/60) = $177. Step b) Go to Move Transaction form. Move 100 units from ‘OP10 Queue’ to ‘OP10 To-Move’ for Job #JOB-B01. 4.38462+$1777.For internal use only .quantity = ($3960+$1330+$133)/(100+30) ~ $41.g.69231 o INV TL Overhead = $122.2 Scenario2: Non-Standard Job Step a) Create Standard Discrete Job #JOB-B01 for Item FG01 for Qty 100.76923 o The completion cost is the total relieved value over the relieved quantity = ($1600+$550+$55)/50 = $44. e. Issue 10 units for Item FG01.2. Process completion transactions of items that have WIP completions. it will have a variance of $320+$110+$11 = $441 left in the job due to the scrap without account performed in step j.doc Oracle/Client Confidential .38462+50x($1920/60) = $5255. Step c) Complete 100 units for Job #JOB-B01. Step d) Create Non-Standard Asset Discrete Job #JOB-B02 for Item FG01 for 10 PAC_Logic_Examples. Step n) Complete 50 units for Job #JOB-A02.76923 Step m) Close Period.69231 o INV TL Overhead = $133-10x($133/130) ~ $122.41674 When job A02 is closed.76923)/(120+50) ~ $42.

Qty 100. Step h) Go to Move Transaction form. Step i) Complete 100 units for Job #JOB-B03. 11 PAC_Logic_Examples. e.For internal use only .g. Process material transactions of items that have no WIP completions e. PUR01 and PUR02 first: 100 PUR01 issued to B01 in step b o B01 PL Material = 0+100x$20 = $2000 100 PUR02 issued to B01 in step b o B01 PL Material = $2000+100x$10 = $3000 100 PUR01 issued to B02 in step e o B02 PL Material = 0+100x$20 = $2000 100 PUR02 issued to B02 in step e o B02 PL Material = $2000+100x$10 = $3000 100 PUR01 issued to B03 in step h o B03 PL Material = 0+100x$20 = $2000 100 PUR02 issued to B03 in step h o B03 PL Material = $2000+100x$10 = $3000 Process resource transactions: 100 RSC01 charged to B01 in step b o B01 TL Resource = 0+100x$10 = $1000 100 OVH01 charged to B01 in step b o B01 TL Overhead = 0+100x$1 = $100 100 RSC01 charged to B02 in step e o B02 TL Resource = 0+100x$10 = $1000 100 OVH01 charged to B02 in step e o B02 TL Overhead = 0+100x$1 = $100 100 RSC01 charged to B03 in step h o B03 TL Resource = 0+100x$10 = $1000 100 OVH01 charged to B03 in step h o B03 TL Overhead = 0+100x$1 = $100 Process completion transactions of items that have WIP completions. Step g) Create Non-Standard Expense Discrete Job #JOB-B03 for Item FG01 for Qty 100.doc Oracle/Client Confidential . Step f) Complete 100 units for Job #JOB-B02. Move 100 units from ‘OP10 Queue’ to ‘OP10 To-Move’ for Job #JOB-B02.g. Move 100 units from ‘OP10 Queue’ to ‘OP10 To-Move’ for Job #JOB-B03. Step e) Go to Move Transaction form.

For internal use only .FG01 100 FG01 completed in step c o B01 PL Material = $3000-100x($3000/100) = $0 o B01 TL Resource = $1000-100x($1000/100) = $0 o B01 TL Overhead = $100-100x($100/100) = $0 o INV PL Material = 0+100x($3000/100) = $3000 o INV TL Resource = 0+100x($1000/100) = $1000 o INV TL Overhead = 0+100x($1000/100) = $100 o The completion cost is the total relieved value over the relieved quantity = ($3000+$1000+$100)/100 = $41 o The periodic cost at this point is the periodic value over the periodic quantity = ($3000+$1000+$100)/100 = $41 100 FG01 completed in step f o B02 PL Material = $3000-100x($3000/100) = $0 o B02 TL Resource = $1000-100x($1000/100) = $0 o B02 TL Overhead = $100-100x($100/100) = $0 o INV PL Material = $3000+100x($3000/100) = $6000 o INV TL Resource = $1000+100x($1000/100) = $2000 o INV TL Overhead = $100+100x($1000/100) = $200 o The completion cost is the total relieved value over the relieved quantity = ($3000+$1000+$100)/100 = $41 o The periodic cost at this point is the periodic value over the periodic quantity = ($6000+$2000+$200)/200 = $41 100 FG01 completed in step i o B03 PL Material = $3000-100x($3000/100) = $0 o B03 TL Resource = $1000-100x($1000/100) = $0 o B03 TL Overhead = $100-100x($100/100) = $0 o INV PL Material = $6000+100x($3000/100) = $9000 o INV TL Resource = $2000+100x($1000/100) = $3000 o INV TL Overhead = $200+100x($1000/100) = $300 o The completion cost is the total relieved value over the relieved quantity = ($3000+$1000+$100)/100 = $41 o The periodic cost at this point is the periodic value over the periodic quantity = ($9000+$3000+$300)/300 = $41 - - 12 PAC_Logic_Examples.doc Oracle/Client Confidential .

Step b) Go to Move Transaction form. Step m) Create Sales Order #SO-C01 for Item FG01 for Qty 100.2. Transfer 10 units for Item FG01 to another Organization. Gain 50 units for Item01.For internal use only . Step h) Go to Miscellaneous Transaction form. Issue 10 units for Item FG01. Process cost carrying transactions before cost derived transactions. Step f) Go to Return to Vendor form. Step i) Go to Subinventory Transfer form. Step k) Go to Physical Count Adjustment from.3 Scenario 3: finished good with complex transaction Step a) Create Standard Discrete Job #JOB-C01 for Item FG01 for Qty 100. Receive the PO. Process Non-WIP related transactions are processed first: o PO Receipt (step d) and Return to Vendor (step f) transactions are performed at the Acquisition Cost (Weighted Average between Invoiced Quantity times Invoiced Price and Uninvoiced Quantity and PO Price) = (50x$70+(100-50)x$60)/100=$65 o INV TL Material = 0+(100-50)x$65 = $3250 o The periodic cost at this point is the periodic value over the periodic quantity = $3250/50 = $65 WIP related transactions are processed next: o WIP Completion (step c) are performed at the Completion Cost (similar to scenario 1 and 2) at $41 o INV TL Material = $3250 o INV PL Material = 0+100x($3000/100) = $3000 o INV TL Resource = 0+100x($1000/100) = $1000 o INV TL Overhead = 0+100x($1000/100) = $100 o The periodic cost at this point is the periodic value over the periodic quantity =($3250+$3000+$1000+$100) / 150 = $49 Process cost derived transactions next: Miscellaneous Issue without user specified cost (step h). Step n) Ship 100 units for Sales Order #SO-C01. Subinventory 13 PAC_Logic_Examples. Step e) Create Invoice for Item FG01 for Qty 50 @70. Transfer 10 units for Item FG01 to Expense Subinventory. Match the Invoice. Step g) Create Debit Memo.doc Oracle/Client Confidential . Move 100 units from ‘OP10 Queue’ to ‘OP10 To-Move’ for Job #JOB-B01. Return 50 units to Vendor for Item FG01.4. Step c) Complete 100 units for Job #JOB-C01. Step j) Go to Inter-Org Transfer form. Step d) Create PO #PO-C01 for Item FG01 for Qty 100 @60. Step l) Loss 30 units for Item 01.

66667/(40x$49))x(40x$80) ~ $43. PUR01 next: 10 PUR01 issued to C01 in step s o C01 PL Material = 0+10x$20 = $200 Process resource transactions: 14 PAC_Logic_Examples.96599+$1306.doc Oracle/Client Confidential .96599 o PL Material = ($800/(40x$49))x(40x$80) ~ $1306.66667 o INV TL Overhead = $100+(-10-10-10+50-30-100)x($100/150) = $26.37416+$43. Step r) Go to Move Transaction form.53742)/40 ~ $80 Process material transactions of items that have no WIP completions e. Step u) Complete 100 units for Job #JOB-C01.66667 o The periodic cost at this point is the periodic value over the periodic quantity = ($866.53742 o The periodic cost at this point is the periodic value over the periodic quantity = ($1414. Step v) Update Item Cost @80 for Item FG01. Step q) Receipt 100 units for RMA Sales Order #SO-C02.66667 o INV PL Material = $3000+(-10-10-10+50-30-100)x($3000/150) = $800 o INV TL Resource = $1000+(-10-10-10+50-30-100)x($1000/150) ~ $266.12245 o TL Resource = ($266.12245+$435. Charge Resource 10 Usage for Resource RSC01 for Job #JOB-C01. Issue Material 10 units for Item PUR01 for Job #JOB-C01. Step p) Create RMA Sales Order #SO-C02 for Item FG01 for Qty 100.66667+$800+$266.66667/(40x$49))x(40x$80) ~ $1414.66667)/40 ~ $49 Step o) Close Period.For internal use only .66667+$26. the cost is prorated across the existing costs (: o TL Material = ($866.37416 o TL Overhead = ($26. Step s) Go to Material Transaction form. Step t) Go to Resource Transaction form. Physical Count (step k and l) and Sales Order Issue (step n) are all processed at the current cost o INV TL Material = $3250+(-10-10-10+50-30-100)x($3250/150) ~ $866. Cost Update with new Periodic Cost is processed first: Assuming no details are entered.66667/(40x$49))x(40x$80) ~ $435. Return 100 units for Job #JOB-C01.Transfer (step i).g. Interorg Transfer* (step j).

42858 o TL Resource = $435.80956 o TL Overhead = $43. instead of being processed at the periodic cost. 15 PAC_Logic_Examples. it will be processed at the perpetual transaction cost. FG01 100 FGI are returned (step r) and completed (step u) from C01.g.- 10 RSC01 charged to C01 in step t o C01 TL Resource = 0+10x$10 = $100 o C01 TL Overhead = 0+10x$1 = $10 Process completion transactions of items that have WIP completions.53742/40) = 152. it will have a variance of $200+$100+$10 = $310 left in the job due to the extra charges in steps s and t.38907+$4571. e.80956+152.96599/40) ~ $4952.doc Oracle/Client Confidential .53742+(100x$43.96599+(100x$1414.37416/40) ~ $1523.38097)/140 ~ $80 If job C01 is closed without further completions.38097 o PL Material = $1306.12245+(100x$1306. *Note that if step j was an intransit shipment across Periodic Cost Group with FOB shipment. the transaction would have been a cost carrying transactions (instead of a cost derived transactions) – in other words.38097 o The periodic cost at this point is the periodic value over the periodic quantity = ($4952. Process other cost derived transactions: 100 FGI are received via RMA (step q) at current periodic cost o TL Material = $1414.37416+(100x$435.For internal use only .42858+1523. These two transactions are processed at the same cost (prior period completion cost of $41) and has no net effect on WIP and INV valuations.12245/40) ~ $4571.

The results for Scenario 3 above can also be viewed in the following format: Period 1 Transaction Transaction Date(ASC) Type Step c WIP Assembly completion PO Receipt 100 Step f Return to Vendor Miscellaneous issue Subinventory Transfer Inter-Org Transfer Physical Count Adjustment Physical Count Adjustment Sales Order Issue Qty Transaction Processing Group 100 WIP Cost Carrying Transactions Non-WIP Cost Carrying Transactions Non-WIP Cost Carrying Transactions Cost Derived Transactions Cost Derived Transactions Cost Derived Transactions Cost Derived Transactions Cost Derived Transactions Cost Derived Transactions Transaction TL Processing Mat Order PL Mat TL TL Res Ovh 3 21.00 0.67 Step n -100 9 21.67 0.00 0.67 20.67 0.00 Step h Step i Step j Step k -10 -10 -10 4 21.00 6.00 0.67 50 7 21.doc Oracle/Client Confidential .67 0.00 6.00 0.00 6.67 Step d 1 65.67 20.67 0.00 6.00 6.67 20.67 0.00 -50 2 65.67 20.00 6.67 6 21.67 Step l 30 8 21.00 0.00 0.67 0.67 20.For internal use only .67 16 PAC_Logic_Examples.67 0.67 20.67 20.00 6.67 5 21.

88 1.Period 2 Transaction Transaction Qty Date(ASC) Type Step q RMA return Transaction Transaction TL Mat PL Processing Processing Mat Group Order TL Res TL Ovh Cost 100 Derived Transactions WIP Cost -100 Carrying Transactions WIP Cost 100 Carrying Transactions Periodic Cost Update with a New Cost / Percentage Change 4 35.67 0.67 20. all cost carrying transactions are processed before the processing of cost owned transactions.doc Oracle/Client Confidential .88 1.37 32. As mentioned in section 3 PERIODIC COST PROCESSING LOGIC.1 b) .For internal use only .67 0. Periodic Cost Updates with a New Cost / Percentage Change are processed before Non-WIP Cost Carrying Transactions.Periodic Cost Updates with a New Cost / Percentage Change .67 20. They are processed based on their types in the following order: . The reason is because in PAC. This is done to calculate the periodic cost.Periodic Cost Updates with a Value Change Basically.37 32.1 a) .65 10.67 Step v 1 35.WIP Cost Carrying Transactions (See section 2. 17 PAC_Logic_Examples.65 10.WIP Component Issue to Rework Jobs (Issuing a component which is the same as the assembly item of the job – the issue is done at the currently calculated periodic cost e.00 6. the transaction date does not always correspond to the transaction processing order. the order in which a transaction occurs within the period should not have an impact on the resulting item cost.g. taking into account the Periodic Cost Updates with a New Cost / Percentage Change and Non-WIP Cost Carrying Transactions performed in the current period) . which is then use to process the cost owned transactions.09 Step r Assembly Return Assembly Completion Periodic Cost Update 3 21.00 6.67 Step u 2 21.09 As one can see. And Non-WIP Cost Carrying Transactions are processed before WIP Component Issue to Rework Jobs and so on.Non-WIP Cost Carrying Transactions (See section 2.

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